Gift and Souvenir Stores NAICS 459420

May 8, 2025 - Slower Growth Forecast

• Sales for the US gift and souvenir stores industry are projected to grow at a CAGR of 1.99% between 2025 and 2029, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. The expected growth rate is slower than the overall economy‘s anticipated growth. The retail and wholesale sectors are driven by consumer spending, along with expenditure by businesses and government. A factor that may limit consumer spending is higher tariffs on consumer goods. On a positive note, lower inflation supports a moderate increase of real disposable income by about 2% in 2025 and 1.9% in 2026. Real income could suffer to an extent if average prices rise due to tariff implementation. The forecast said retail spending could soften with the growth of spending on consumer services such as travel and live entertainment. An increase in tourism can help boost traffic at gift and souvenir stores.
• Retail sales rose in April 2025, as consumers moved up some purchases to avoid potential higher prices with new tariff implementation, according to the CNBC/NRF Retail Monitor released by the National Retail Federation. Total retail sales, excluding automobiles and gasoline, increased 6.7% unadjusted year over year in April 2025 and 0.72% seasonally adjusted month over month. Eight out of nine retail categories were higher in April compared to a year ago, led by digital products, electronics and appliance stores, and grocery and beverage stores. Total retail sales for the first four months of the year were 5% higher year over year. According to NRF President and CEO Matthew Shay, “Despite declines in confidence caused by the economic uncertainty that has come with tariffs, consumer fundamentals remain intact, supported by low unemployment, slower-but-steady income growth and solid household finances. Consumers maintain their ability to spend and have strong reasons to spend now before tariffs can drive up prices or cause shortages on store shelves." The CNBC/NRF Retail Monitor uses actual, anonymized credit and debit card purchase data compiled by Affinity Solutions.

• According to a report in CFO Dive, consumer sentiment, an indicator of discretionary spending, fell in large part due to tariff uncertainty and an expectation of higher prices. The final index of consumer sentiment from the University of Michigan dropped 8% in April 2025 from the previous month. An index measuring consumers’ expectations for the future fell nearly a third since January, the steepest three-month percentage decline since the 1990 recession. According to survey director Joanne Hsu, “Consumers perceived risks to multiple aspects of the economy, in large part due to ongoing uncertainty around trade policy and the potential for a resurgence of inflation looming ahead.”
• Gift and souvenir stores, which rely heavily on goods imported from China, are preparing for the wide-ranging impacts of new Trump Administration trade policies. Anticipating the growing tariffs, US retailers began stockpiling goods before the costs went up, according to the latest Global Port Tracker report in Gifts & Decorative Accessories. According to Jonathan Gold, VP of Supply Chain and Customs Policy at the National Retail Federation, “Retailers have engaged in mitigation strategies to minimize the potential impact of tariffs, including frontloading of some products, but that can lead to increased challenges because of added warehousing and related costs.” Retailers also continue to diversify their supply chains to bypass tariff countries. “Unfortunately, it takes significant time to move supply chains,” Gold noted.